If there are any lessons we can learn as we transition into the post-pandemic world, it’s the lessons of entrepreneurship and how successful launching your own business can be. Of all the many steps you must go through in setting up your own business, one of the biggest areas of confusion is when it comes down to writing up your business plan. This article will guide you through the key areas you will need to cover in your plan, explaining the key concepts, and giving out a few tips along the way.
What is a business plan?
The UK Government describes a business plan as “A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.” In a nutshell this is a document you create when you are registering your business which outlines all the key information about the company and how it operates to firstly help organise your process within the company and secondly, to give a complete view of your business to any future potential investors. It also gives you a base to be able to measure your progress and hopefully help you spot any potential problems you might encounter so you can be prepared early.
The other main benefit to a well-structured business plan is it opens the doors to investors. This is because when your company is new, investors could be reluctant to invest in a business without being able to see its track record so a business plan is also useful for this.
Whilst this plan is useful when starting, as your business grows this plan should be checked and updated periodically to see if any of the goals have been met and if new goals need to be defined.
Sometimes an established business will draw up a new business plan if they decide they want to pivot the business in another direction.
Writing your business plan
There are seven main sections you will need to cover in your business plan to make sure you give a comprehensive view of your plans. As each business is unique, sometimes some of these sections might not be fully relevant to your business, but through the explanations you should be able to work out what it means to you.
Most similar examples list them as the order you display it in, not the order you write it in. Be mindful of this and read through every step before you start writing the plan in full.
The first section of your plan is your executive summary, as this is an overview of all the content you are discussing in the rest of your plan it is usually advised to write this last once you have your full plan written as it will be easier to summarise it once it has been written.
An Executive Summary is where you sell your business to any potential investors by outlining the best qualities of your business. You will use this section to highlight what makes your business unique in how it serves its customers.
To start your Executive Summary you should outline your mission statement, which is a description of your business and what your long term goals are. Then go on to describing the founders of the company and give a bit of information on their backgrounds. This is where you can really highlight the talent and skill level behind your company.
After that part you should move onto discussing the projected financial success of the company with quantified data to determine where your business is going and how profitable it is projected to be.
After this you should briefly discuss what your products or services are, discuss this in a way that highlights what you are offering is appealing to the consumer. As mentioned before, this doesn’t need to be in the greatest detail as this will be covered in the relevant section later in the document.
Especially if you are looking for investors in your company, rounding off your executive summary by discussing any current investors which you have and what your current capital is.
As mentioned above, you will probably be writing your Executive Summary at the end once all the rest of your plan has been written, this means this section will usually be the first one you start writing.
This description will cover in great detail the different types of customers which you will be targeting as an audience for your business and the different specific ways in which you can meet those specific needs. This section you will also discuss what competitive advantage you have in your market and how you are going to be able to gain market share within it. For example, discuss what are the Unique Selling Points (USPs) of your service or product and what the current market has an opening which you will be able to fill.
In this Market Analysis section you outline how your industry functions and operates within the market and what your strategy for the future will be. In this section you should describe the specifics on your sales forecasts, milestones, and your competitors and how you are going to have the competitive advantage against them. If you are looking at securing investors this will be the section where you really sell the idea behind your business and how it will succeed.
When discussing the market you are operating in make sure to discuss the facts about it, this includes the size of said market, or the geo-locality of the market if you are focusing on traditional brick and mortar style of business. If working on a purely digital business it would be good to look at competitors of a similar size of your projected growth when doing comparisons, as for some digital offerings geolocation isn’t as much of a relevant factor.
If you are a new start-up and lack some of the tools or skills to produce the data analysis you can use this opportunity to use customer testimonials to help back up your points.
Organisation and Management
This is the section where you can really put a spotlight on the individual skills and talents of the members of the management and the executives. Use this section to give a bio about each member, highlighting not only the relevant experience which would give potential investors confidence in the team they are investing in, but also some of the quirkier interesting things they may have been involved in to really express the human element to your company.
This section is where you will also discuss the structure of the company and how responsibilities are delegated. This firstly gives a clear description of exactly how your company works and who is responsible for what. Secondly, this level of planning a structure will help make it clear to all those involved to refer back to if any issues arise.
If you plan on having a larger scale workforce you can use this section to outline how company progression works within your business like the avenues for promotion or any performance incentives offered.
If possible this section is where the use of visual aids like charts and graphs can be used to great effect to clearly convey what you are outlining within this section.
Products & Services
This section is one of the more self explanatory areas of the business plan. In this section you will list and explain the products and services your business offers. In your explanation you should make sure to mention what makes your products or services different and better than your competitors on a specific level and on a more general brand level.
This is another section where the use of visual media can greatly help hit home what you are trying to convey.
This is the section where you put into words how you are actually going to see growth, what plans and actions are going to put into place to reach the goals you have outlined in the earlier sections. One you have discussed how you are going to reach your goals, outline some plans for expansion for the future if you manage to meet your targets at a good rate. If you have an online and an offline plan which are different in how you are going to market and advertise your services, this section is where you can explain those differences and what style and kind of advertising and marketing strategies which fit your business the best.
In this final section this is where you discuss the financial goals of your business. Combine your market analysis you have done with the goals of your business and explain how the said goals will achieve the effect in the market that you would have discussed earlier in the plan. If you have been operating as a sole trader beforehand and have some business figures to show, you can use this section to show the trend your business is going in and how it will reach the goals set out.
If you are a start-up you will not really have any of this data yet so instead in this section you will use your projections and forecasted figures to build an image of what you are planning to aim for financially with your business.
In the grand scheme of things many more businesses fail to get off the ground than manage to succeed, which is one of the harsh truths of the world of business. One of the best ways to help protect yourself against failure within business is to be well planned and organised. A business plan is that first step and hopefully with the information above you can make a start of planning out your business and maybe take the first main step to starting your own successful business.
Nathaniel is a Web Design Executive who also writes content on technology and loves spending his days researching and building new projects, and generally complaining about new trends.